Ceiling Fans by Ike's Overhead Budget for 2009 Was as Follows

question 27

Multiple Choice

Ceiling Fans by Ike's overhead budget for 2009 was as follows: $\begin{array}{|lr|}\hline\text { Factory supervision } & \$ 300,000 \\\text { Utilities costs } & 150,000 \\\text { Insurance } & 28,000 \\\text { Property taxes } & 22,000 \\\text { Depreciation } & 100,000 \\ \text { Total } & \$ 600,000 \\\hline\end{array}$
600,000 units were produced in 2009.
Direct labor cost is $18,000,000.
For both 2009 and 2010,each unit required 3 direct labor hours at $10 per hour.
In 2010,property taxes,insurance,and depreciation are expected to stay at 2009 levels.
Utilities costs vary proportionally with units produced.
Factory supervision increases by increments of $30,000 for every 200,000 increase in direct labor hours.
The 2010 expected production is 1,200,000 units.
What will be the value for utilities costs in the 2010 overhead budget?

• A) $420,000
• B) $150,000
• C) $300,000
• D) $450,000

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Definitions:

Frederick Taylor

An engineer who is considered the father of scientific management, emphasizing efficiency, systematic management, and task specialization.

Scientific Management

A management theory developed by F.W. Taylor that emphasizes efficiency and productivity through the measurement, and analysis of workflow.

Operations Management

A field of management concerned with designing and controlling the production process and redesigning business operations in the production of goods or services.

Hand Labor

Work performed manually without the use of machines or technology, often requiring physical effort or skill.